1. USCo, a domestic corporation, has worldwide taxable income of $1,500,000, including a $300,000 dividend from ForCo, a wholly-owned foreign corporation. ForCo's post-1986 undistributed earnings and profits are $16 million and it has paid $10 million of foreign income taxes attributable to these earnings. What is USCo's deemed paid foreign tax credit related to the dividened received (before consideration of any limitation)?
a. $10 million
b. $16 million
c. $ 187,500
d. $487,500
2. In a proportinate liquidating distribution, Barbara receives a distribution of $40,000 cash, accounts receivable (basis of $0 and fair market value of $20,000), and land (basis of $20,000 and fair market value of $30,000). In addition, the partnership repays all liabilities, of which Barbara's share was $40,000. Barbara's basis in the entity immediately before the distribution was $50,000. As a result of the distribution, what is Barbara's basis in the accounts receivable and land, and how much gain or loss does she recognize?
a. $0 basos om accpimts receovab;e' $0 basis in land; $30,000 gain.
b. $0 basis in accounts receivable; $10,000 basis in land; $0 gain or loss.
c. $0 basis in accounts receivable; $20,000 basis in land; $0 gain or loss.
d. $20,000 basis in accounts receivable; $30,000 basis in land; $40,000 gain.
e. $20,000 basis in accounts receivable; $30,000 basis in land; $80,000 gain.
3. Malin, a 51% owner of an S corporation, has a stock basis of zero at the beginning of the year. Malin's basis in a $30,000 loan made to the S corporation and evidenced by a corporate note has been reduced to zero by pass-through losses. During the year, her net share of corporate ordinary income is $12,000. At the end of the year, Malin receives a $14,000 distribution. Determine any taxable income from the distribution.
a. $2,000 capital gain
b. $2,000 ordinary income
c. $12,000 ordinary income
d. $14,000 ordinary income